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India: NMDC cuts iron ore prices by upto INR 450/t ($6/t)

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Fines/Lumps

BigMint Bureau

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30 May 2023, 06:36 IST

India: NMDC cuts iron ore prices by upto INR 450/t ($6/t)

India's largest merchant iron ore mining company, NMDC, has decreased list prices of iron ore today, SteelMint learnt from reliable sources. The company has cut prices of DR-CLO by INR 300/tonne (t) and fines by INR 450/t, effective from 30 May, 2023.

NMDC fixed prices for DR CLO (Fe 67%, 10-40mm) at INR 5,220/t and iron fines (64% - 10mm) at INR 3,560/t (FoR prices from Bacheli complex, excluding royalty, DMF and NMET) with effect from today.

Factors behind the price cut:

Odisha iron ore fines prices fall m-o-m: SteelMint's Odisha iron ore fines (Fe 62%) index fell m-o-m by INR 200/t in May and was recorded at monthly average of INR 5,500/t ex-mines amid fall in pellet prices, curtailed pellet output and limited trading. Weak response to the Odisha Mining Corporation's (OMC's) iron ore auction also kept iron ore prices under pressure. At OMC's 746,000 t of iron ore fines (Fe54-64%) auction held on 18 May, only 16,000 t (Fe55-58%) were booked.

Domestic pellet prices fall on lower trade: SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, fell by around INR 420/t m-o-m amid limited trade. Pellet prices dropped due to lower bids on falling sponge prices and drop in pellet exports.

Pellet export prices decline by $10 tracking global price drop: Demand for pellets and other high-quality raw materials used in the production of steel was sluggish due to muted demand in China. Buyers are mostly preferring to buy from the portside market against the seaborne market. Declining global iron ore prices has also weighed on pellet export prices. SteelMint's India pellet (Fe 63%, 3% Al) export index FOB east coast edged down by around $11/t to $98/t m-o-m. Meanwhile, pellet export volumes showed a drop of 23% in April, reveals SteelMint's data.

Global iron ore prices fall to a 6-month low on weak Chinese demand: Iron ore Fe 62% fines spot prices in China decreased by around $12/t to a monthly average $105.47/t CFR, m-o-m. Weak demand fundamentals, liquidity issues and slow trading activity dragged seaborne iron ore prices down. Towards end-May 2023, prices fell to a 6-month low.

India's steel index hits a 5-month low: In a downwardly-mobile steel market, the India Steel Composite Index hit a five-month low. With exports down, domestic prices under pressure and imports a cause for concern, Indian mills are facing multiple challenges even as they stare at inventory pile-up in their yards. Primary mills may announce price cuts for June sales. Chances are equally strong for production cuts next month to ease the inventory burden. Such a scenario will also likely have an impact on raw material prices.